Iroquois Gas Transmission System LP filed a settlement offer with FERC on Thursday, agreeing to lower its rates for shippers in three phases over the next two years and promising not to raise them through August 2020.

Last January, commissioners with the Federal Energy Regulatory Commission voted 4-0 to initiate separate Natural Gas Act Section 5 investigations into four companies — Iroquois, Tuscarora Gas Transmission Co., Empire Pipeline Inc. and Columbia Gulf Transmission LLC — to determine “the justness and reasonableness of…currently effective tariff rates,” (see Daily GPI, Jan. 21). The Commission appointed four settlement judges, one for each case, on March 23.

According to a 56-page stipulation and settlement agreement filed Thursday with FERC [RP16-301], Iroquois held four conferences with its customers — one in April, one in May and two in June — to discuss the rate case before reaching a compromise. It requested that FERC approve the settlement by Dec. 1.

“This settlement is the result of numerous compromises between and among Iroquois and the active participants,” the pipeline company said. “The settlement reflects a package of interrelated provisions that will resolve all issues in this proceeding, reduce Iroquois’ rates in three scheduled step-downs and ensure rate predictability and stability through August 31, 2020.”

Specifically, Iroquois has offered to reduce its rates — for hub service, extended receipt and extended delivery, and Eastchester and non-Eastchester shippers — on Sept. 1 of 2016, 2017 and 2018. During the rate moratorium, Iroquois will be allowed to file an update to its fuel and losses mechanism and may update its tariff rules, including changes to critical notices and operational flow orders. It may also file to update and clarify its right of first refusal tariff provisions, or to clarify its service rights.

Iroquois included a list of 43 participants that either support or do not oppose the settlement. Those participants include BP Energy Co., Cabot Oil & Gas Corp., ConocoPhillips, Consolidated Edison Company of New York, Inc., Exelon Corp., Iberdrola Energy Services LLC, National Grid Gas Delivery Companies, New Jersey Natural Gas Co., the New York Public Service Commission, the Southern Connecticut Gas Co. and Yankee Gas Services Co.

Tuscarora [RP16-299] filed a similar settlement offer with FERC on July 15. Empire [RP16-300] and Columbia [RP16-302] did likewise on July 22 and July 26, respectively. An administrative law judge certified the Tuscarora settlement on Aug.1, and the Columbia settlement on Aug. 15.

The investigations follow reviews by FERC staff into the cost and revenue information the companies supplied in several filings — specifically, Form No. 2, the Annual Report for Major Natural Gas Companies; and Form No. 2-A, Annual Report for Non-Major Natural Gas Companies — for 2013 and 2014 (see Daily GPI, May 26). Using that data, regulators calculated a cost of service for each pipeline and determined what each pipeline’s revenues were for those years.

The analysis indicated Columbia had a calculated return on equity (ROE) of 17.3% in 2013 and 18.2% in 2014; Iroquois had ROE of 16.2% in 2013 and 16.3% in 2014; Empire had ROE of 15.8% in 2013 and 20.2% in 2014; and Tuscarora had ROE of 23.6% in 2013 and 24.9% in 2014.